Interlocking Corporate Directorships as a Social Network

Abstract

Abstract. Outside directors are now a majority on the boards of the‘Fortune 500’corporations creating a network of interconnections through interlocking directorates. Details of this phenomenon and explanations for its significance can be found in an earlier article in this Journal*. This network can be visualized as a system through which common norms, values, and a sense of “weness” can flow. This sense of being part of a corporate establishment would have significant effects on corporate conduct. From what top corporate leaders say and do, the validity and implications of this hypothesis are examined. This class hegemony theory views power as shared within a system of social relationships, in contrast to the management control theory which considers management as in total control.

"Segurando na mão de Deus": organizações religiosas e apoio ao empreendedorismo

“…Para os nossos propósitos, entendemos redes sociais como um conjunto de atores (pessoas ou organizações) conectados por relações sociais ou laços de um tipo específico (CASTILLA et al, 2000). As redes podem incluir tanto relações formalmente instituídas quanto relações informais e são simultaneamente resultado e causa de um conjunto de forças que agem sobre as pessoas ou unidades sociais (KOENIG;GOGEL, 1981, p. 40).…”

Corporate elites and intercorporate networks

“…Taking into account the embedded character of corporations and directors, these approaches depicted the power structure as a formation within which elite individuals and capitalist enterprises pursued particular goals while often contributing to wider class-based interests, as in the allocation of investment capital and the solidification of class hegemony. Many authors have stressed the complementarity between these approaches (Koenig and Gogel, 1981;Scott, 1985;Stokman et al, 1988). In combination, they depict corporate interlocks as "traces of power" (Helmers et al, 1975, cited in Fennema andSchijf, 1978) of two sorts: the instrumental power associated with the accumulation of capital and the expressive power associated with class hegemony (Carroll, 2004;Sonquist and Koenig, 1975 …”

“…At the level of individual directors, common participation in civic and political organizations (social clubs, foundations, universities, business associations and forums) as well as on corporate boards was found to foster social cohesion (Domhoff, 1974;Koenig and Gogel, 1981;Moore, 1979).…”

“…Domhoff (1974) drew from experimental research on group dynamics to show that proximity and face-to-face communication enhance group cohesion, which in turn facilitates consensus formation in problem solving. For power structure researchers, the extensive network connecting corporate directors, layered upon personal networks that reach back to common educational and social backgrounds, promoted a common worldview (Koenig and Gogel, 1981), the basis for elite consensus and for concerted political agency (see Bond and Harrigan, this volume).…”

“…Interlocks are considered an expression of class cohesion, allowing for the integration of potentially contradictory interests (financial, industrial, commercial) of the richest families, whose investments span different sectors (Soref and Zeitlin, 1987: 60). In the class hegemony perspective, interlocks serve as channels of communication between individual directors, facilitating a common worldview among them (Koenig and Gogel, 1981), and giving the "inner circle" of interlockers access to a broad resource base from which to exert their hegemony in and beyond business circles (Useem, 1978).…”